US Eyes India as Fourth-Largest Cotton Market in 2026 Amid Area Decline and Monsoon Uncertainty

Gary Adams, President of the US Cotton Trust Protocol, told BusinessLine that India is currently competing for the position of the fourth-largest destination for American cotton in the ongoing marketing year — a ranking that could solidify further in 2026.

The driver is straightforward: a contraction in area under cotton cultivation within India, compounded by anxieties over the monsoon, is expected to widen the supply gap that imports must fill. The USDA has already responded by revising India's cotton import estimate for the season ending September upward to 56.9 lakh bales (of 170 kg each), against a previous projection of 53.18 lakh bales.

Separately, the Cotton Association of India has projected the country's cotton exports at 60–65 lakh bales, a figure made feasible in part by the government's suspension of the 11 per cent import duty on the natural fibre, which has made procurement of foreign cotton more viable for domestic mills.

The geography of US cotton trade has shifted noticeably over the past year. Vietnam has emerged as the single largest market for American cotton exports, driven by a robust and expanding textile manufacturing base. Bangladesh continues to be a reliable buyer, with its garment industry sustaining steady import volumes.

China, historically one of the most significant consumers of US cotton, has seen its purchases soften materially. Adams attributed this directly to escalating trade tensions between Washington and Beijing, which have dampened the flow of American fibre into Chinese mills.

On the demand side, the USDA's latest estimates for 2026–27 project global cotton consumption rising to 122 million bales — up 200,000 bales from the prior year — against forecast production of 117.3 million US bales (of 217.7 kg each). The resulting supply deficit underpins the relatively firm price environment currently prevailing in global markets.

Cotton on the Inter-Continental Exchange is currently trading at a two-month high of over 82 cents a pound, with renewed US–Iran tensions pushing crude oil prices higher and feeding through to commodity markets.

Higher energy prices are creating a dual effect on the fibre market. On one hand, they are raising the cost of petroleum-based synthetic fibres such as polyester, nudging apparel buyers back towards natural fibres. On the other, they are squeezing producer margins across the board.

In the United States, Adams noted that the cost of cotton production has risen approximately 20 per cent over the past two to three years, reflecting higher outlays on chemicals, equipment, labour, fertiliser, and fuel. This cost inflation is exerting significant economic pressure on American growers even as more farmers are planting the crop this season. Adams flagged that the final US crop size remains uncertain, with drought conditions across much of the cotton belt under close watch by the protocol.

Beyond price dynamics, two structural trends are working in cotton's favour globally.

Microplastics and microfibres shed by synthetic apparel are increasingly being detected in food and water supplies. Adams said this emerging consumer health concern is prompting a renewed preference for natural fibres, and cotton is well-placed to capture that shift in demand.

Textile recycling, while attracting growing interest from brands and policymakers, remains technically constrained. Adams acknowledged that current technology does not yet allow a recycled garment to be seamlessly converted back into spinnable yarn. He pointed instead to a near-term opportunity in blending recycled material with virgin cotton, but stressed that meaningful progress will require further research investment.

The US Cotton Trust Protocol — established six years ago with a sustainability mandate — is developing a certification programme that includes regenerative agriculture, working with growers on logos and labels to differentiate sustainably produced American cotton in global markets.

The US Cotton Trust Protocol is actively lobbying the Indian government to broaden its import duty relief. At present, New Delhi has suspended the 11 per cent import duty on cotton only for long staple varieties, with the exemption running until 30 September.

Adams said the protocol is pushing for the waiver to be extended to short and medium staple cotton as well, arguing that comprehensive duty relief is essential to keeping the Indian textile sector competitive in global markets. The association has been communicating this position directly to the government.

More broadly, Adams struck an optimistic note on the bilateral trade relationship. He said the protocol is closely tracking government-to-government trade negotiations between India and the United States, and expressed confidence that the commercial relationship between American cotton growers and Indian textile manufacturers would continue to deepen. He was in India to meet the textiles industry and attend the Bharat Trade Show.